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The European Union will soon have its own first-ever cybersecurity rules, which will impact a broad range of industries, such as transportation, energy, and online marketplaces. On December 7, 2015, the European Parliament and the Council of the European Union, which is comprised of representatives of the 28 EU countries, reached a political agreement on the draft Directive on Network and Information Security (the NIS Directive).1 Although the final text is still being finalized at the technical level, it is expected to be formally adopted in early 2016.
Continue Reading EU Agrees to New Cybersecurity and Incident Notification Rules

In late 2015, the U.S. Department of Health and Human Services (HHS) announced three settlements in which the agency will collect over $5 million in collective penalties for alleged non-compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). In addition to the monetary penalties, each of the settlements requires compliance with a Corrective Action Plan (CAP), calling for the organizations to invest significant resources toward HIPAA compliance.
Continue Reading HHS Ends 2015 with Three HIPAA Enforcement Settlements

ThinkstockPhotos-469750754-webOn September 29, 2015, the PCI Security Standard Council (PCI SSC) issued guidance regarding data breach responses for merchants and service providers who process payment cards. The PCI SSC is a global forum founded by card brands (American Express, Discover, JCB, MasterCard, and Visa), and it is responsible for the development and management of the data security standards (i.e., the PCI-DSS and the PA-DSS standards) required by the card brands’ security programs. The new guidance includes the PCI SSC’s recommendations on: (i) how to prepare in advance of an incident to reduce risks and costs; and (ii) engaging and working with a Payment Card Industry Forensic Investigator (PFI) following a cardholder data breach.
Continue Reading PCI Security Standards Council Issues Guidance on Responding to a Data Breach

Companies have been pressing the Federal Trade Commission (FTC) for additional guidance on data security, and the agency recently delivered. On August 10, 2015, the FTC issued a public closing letter to Morgan Stanley Smith Barney LLC (Morgan Stanley) regarding the agency’s investigation into concerns that the company “fail[ed] to secure, in a reasonable and appropriate manner, account information related to Morgan Stanley’s Wealth Management clients.”1 In the context of data security investigations, closing letters—which explain why FTC staff opted to close an investigation—have the potential to offer helpful insights on what security measures the FTC considers to be reasonably designed to protect the privacy and security of personal information. Knowing what factors influenced the FTC staff’s decision to close an investigation in one instance is equally instructive as knowing why the staff decided to pursue an enforcement action in another.
Continue Reading FTC Closing Letter Confirms the Importance of Implementing Employee Access Controls

On June 29, 2015, the Council of the European Union (comprised of representatives of the 28 EU Member States) reached a political agreement with the European Parliament on the main principles of the draft Directive on Network and Information Security (NIS Directive) governing cybersecurity issues.1 The draft NIS Directive is an advanced piece of draft legislation in the EU that, once adopted, will likely concern a significant number of companies doing business in Europe.2 The final text is expected to be adopted sometime in late 2015, however the ultimate timing will depend on the political developments.
Continue Reading New EU Trends: Cybersecurity and Breach Notification

Prompted by data breaches affecting large retailers in the United States, the California legislature recently passed Assembly Bill 1710 (A.B. 1710) to update the state’s breach notification law to require breached entities to provide free credit monitoring services to affected individuals following certain types of data breaches. This change, effective January 1, 2015, was recommended by the California Attorney General’s Office in its 2013 Data Breach Report. The Attorney General’s Office recently published its 2014 Data Breach Report, and its recommendations provide insight into the office’s enforcement priorities. The recommendations may also find their way into California law.
Continue Reading California Amends Data Breach Notification Law and State Attorney General’s Data Breach Report May Lead to More Changes